Trade Court Rules for Primrose Oil Importer

(CN) – The U.S. Court of International Trade refused to grant the government a $17.7 million default judgment against a British pharmaceutical company accused of smuggling an unsafe food additive into the United States.

The Food and Drug Administration in 1985 banned the importation of evening primrose oil, because the substance had not been approved by the FDA. Capsules of evening primrose oil are used to treat eczema, rheumatoid arthritis and menstrual pain, among other conditions. According to the government, Callanish Ltd. knowingly submitted false invoices that hid the nature of its merchandise and the identies of its buyers, Efamol Limited and successor Scotia Pharmaceuticals, from the U.S. Customs Service. The company allegedly described the evening primrose oil as “edible capsules of vegetable oil” or “edible oil capsules with alpha-tocopheryl” and stated that the capsules were “for use [as] a vitamin supplement for cattle,” when they were actually intended for human use. Callanish, Scotia Pharmaceuticals and Quantanova allegedly imported more than $18 million of evening primrose oil. Callanish is a British company headquartered in Scotland. Because the government was able to serve only Callanish, it requested dismissal of defendants Scotia and Quantanova. It also sought a default judgment against Callanish for $17,734,926, plus interest. Judge Stanceau rejected the judgment request, saying the government “has not established its entitlement to the judgment by default.” Stanceau said the complaint “is deficient as a whole,” because it lacks evidence to back up the claims and does not adequately link Callanish to the alleged fraud. The trade court agreed to dismiss the other defendants.